Analysis: Obama's Trade Nominee's Cayman Bank Accounts

By Elspeth Reeve

June 5, 2013

Another Romneyesque figure has been spotted in President Obama's administration.

Michael Froman, nominated to be the U.S. trade representative, has about $500,000 in a Cayman Islands account, The New York Times' Jonathan Weisman reports. Froman, a former investment manager at Citigroup, also benefitted from the "carried interest" loophole that helped Mitt Romney stay so rich. It allows private equity and hedge fund managers to claim earnings as capital gains, which is taxed at 15 percent, instead of as regular income, which is taxed at a rate of up to 39.6 percent. Obama's nominee for Commerce Secretary, Penny Pritzker, whom the president nominated on the same day. is also a quite Romneyesque. Pritzker is the heir to a hotel fortune, the subject of union employees' wrath, and comes from a family that "were pioneers in using tax loopholes to shelter their holdings." Also, she is so rich she "inadvertently omitted" $80 million in income.

Republicans have noticed. Obama "railed against fat cats who avoid taxes offshore," Iowa Sen. Chuck Grassley said, yet has nominated two people with lots of cash in the Caymans. Froman says he will sell off the Cayman account within 90 days of being confirmed as trade representative. "Mike Froman has paid every penny of his taxes and reported all of the income, gains and losses from the investment on his tax returns," a White House spokesman said. Funny, Mitt Romney said the same thing: "I've paid all the taxes required by law."